With the companies behind your credit cards facing new laws that curb their ability to make money like they used to, many card users are seeing their credit limits cut or their cards canceled outright. The most disturbing trend for some credit card customers, however, is the sharp rise in interest rates that some companies are imposing. If you use credit cards, make sure you read the fine print of your agreement with the company. If you find changes to your interest rate that you don’t like, consider negotiating a lower rate or looking somewhere else for a better card. Though this is a difficult economy for credit, you can usually find rates better than the exorbitant ones many cards are offering now.
Find Out Where You Stand
Before you make any moves, check your free credit reports and look at your credit score. This will give you a good indication of where you stand with the companies that hold your credit cards. Make sure you take the time to fix any mistakes that you find on your credit report, as this will raise your credit score and make you more desirable to the credit card companies. You will have a much better chance of negotiating a lower rate on your current cards or finding new cards that offer you a low rate if your credit is good.
Talk to Your Credit Card Company
Once you know where you stand regarding your credit, talk to your credit card company. Ask them about the reasoning behind the interest rate hike and let them know you’re disappointed and interested in pursuing other options, even if it means taking your business elsewhere. If they persist in only offering you the higher rate, gently remind them of your credit score and repayment history if these are good. While they still might not offer you the rates you want, you will have given them every chance to do so.
Know Where to Look
If your credit card company isn’t willing to negotiate your interest rate and having a lower one is important to you, you’ll want to look elsewhere for a better deal on a different card. While applying for a new card will take a few points from your credit score, getting a better interest rate can be worth it if you’re not looking to take out a significant loan in the next year or so. Check into credit cards offered by local banks and credit unions, as these generally have lower interest rates than the cards offered by large, national companies. You might have to take out an account to qualify, but the lower interest rate just might be worth it.
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